PDT Blog

Robin's Rant 3 - Tuesday 23 June 2010

Now we know what Chancellor George Osborne meant when he warned after the UK General Election of the need for swingeing cuts in spending and an increase in the tax take.

The headline item for all of us is the planned increase in Value Added Tax (VAT) in the New Year 2011. For individuals this will raise prices across-the-board, but at least it leaves fuel and alcohol alone for now.

The rise in Capital Gains Tax (CGT) will hit those with assets to dispose of, but at least the rate is not to rise to the suggested 40 – 50%.

For those in business, the small reductions in Corporation Tax over the next three years offer some relief. And scrapping the planned increase in National Insurance (NI) means no adverse effect on the cost of labour.

The goal remains the same

The bottom line, however, is the same as it was: we must all make our businesses (and lives) leaner without becoming meaner. We want to do business without giving anyone cause to label us a Shylock. We must strive to provide a product or service – and service includes the work we do as an employee for an employer – that is as good as or better than previously provided and delivered at a lower cost.

The Employee

So how do employees deliver their service at a lower cost? As I have moved around the UK working for a multitude of businesses and organisations from small to large both public and private it is noticeable how the different groups work. On occasion just walking into the office, however attractive and airy that may be, there is an atmosphere of inertia. People are doing their jobs, but there is no buzz either of excitement or of activity.

Just raising the heart rate of the office will have a marked effect on the work done - and that’s work done right first time, without the need to redo anything. The traditional production shop floor does not show these symptoms nearly so often; perhaps because of the constant bustle of materials and people moving around and rhythmic mechanical noise.

The Employer and Manager

And for the employer or manager? They will look for more efficiency and lower costs, of course; but how to achieve this is the constant question. Good managers will look as far across the organisation as possible to identify ways in which his group, department or division can deliver more for less. But not at the expense of others. In the big scheme, there is no point in making a small group super-efficient if those around it have to make compromises and use workarounds to make it happen. Robbing Peter to pay Paul is never a good long term strategy.

Consider your area of responsibility as a business. Look at the inputs and outputs; identify their sources and destinations. Ask questions: do you need all the inputs you receive? Could the providers offer you something different that would be easier for you to use and possibly easier for them to produce?

Talk to the people ‘down the line’ who receive your outputs. Do they need them? Do they have to change the format of the data before they can use it? Is that something that you could achieve for them at little or no extra cost or time? Is the data needed at all, or are you told "we’ve always done [it like] that"?

Business is Dynamic

Study every communication and all data that flows into and out of your area of responsibility. Then do the same for every item within your area. These are tasks you’ve done many times before. But do them again and repeat them at regular intervals.
No business is static; businesses move and mutate; chunks of the business move between divisions or departments; groups are created and others dissolved or absorbed. The primary constant of business is there will be change; continuous, subtle change that requires changing processes to maintain that vital leanness.
The lean machine –we must all strive for that, both personally and collectively in our business. That way we will survive the next few years and emerge stronger and better able to benefit from whatever faces us next.

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Robin's Rant - 2 - Tuesday 23 June 2010

Recently, I discussed the position many businesses will find themselves in during the next few years, regardless of their political colour or favour. Now I want to concentrate on helping make a small sector of businesses leaner and more efficient.

If your business is creating custom-made business software applications either as an IT department or as a service to third-party customers, how can you improve your service and lower your costs? Software creation is a fraught business needing good project management skills and an eye for detail.

The payback with project management frameworks

Using project management frameworks like PRINCE2 will repay your investment in them, the training to support and use them. You work through a framework of check and balance, supplier and customer, plan and report that ensures the project team has a full picture of what is expected and what has been achieved.

While such management is essential in today’s complex project landscape, there remains the task of creating and delivering the software identified in the plan. The software system has to be made from scratch and it has to conform to a specification of requirements. No project management help here. It’s down to showing the software produced meets the requirements with few bugs left after testing.

With current software development methods there is no way of ensuring that a piece of software meets its requirements and contains no bugs. Writing code by hand is subject to human error and the use of compilers or interpreters will not identify all the human-introduced bugs in the resulting system.

Traditionally, a series of complex test stages identify and filter out most of the bugs in the system. This testing can take up to half the time devoted to software production and some unidentified bugs will remain. They may be small and insignificant or large and affect the integrity of the systems itself or the results it produces.

A new way of developing software

A modern approach to the software development cycle preserves the specification of requirements is key to the process of software development and testing. Get the specification right and the software will follow automatically. It will be right and there will be no human-introduced bugs. To achieve this position, express the specification in a language that is much easier to understand and use than the average programming language. At any point in the specification development you can check the current state of consistency to ensure no errors within the specification.

To ensure the specification is correct, something that is traditionally hard to demonstrate, offer test data to the specification and inspect the resulting response. This is like running the User Acceptance Test (UAT) suite at specification time. Complete the testing, make any necessary corrections to the specification and you’re ready to go!

But go where? You have a better specification than before. So what?

The language used to develop the specification has properties similar to a programming language. This means that a specialist code generator can produce your software system in a fraction of the time needed by humans, directly from the specification. The resulting system conforms precisely to the specification, has no human-introduced bugs and is ready to run. Also, the system will cost significantly less to develop than using traditional development cycles. Code generation performed at machine speed slashes the time needed to complete the system. Usually this halves both cost and time.

Remember the specification testing cycle which was like the traditional UAT? That has already been performed on the specification and the results known, so repeating the tests on the final system is not essential.

What about maintenance and future support? It’s performed by changing the specification only where needed, testing and generating a new, bug-free, system. You get a cheaper maintenance cycle included at no extra cost.

If you need to slim down your business, apply this technology and steal a march on the opposition while delivering and maintaining systems faster and cheaper.  

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Robin’s Rant - Wednesday 19 May 2010

Finally, the dust settles after the UK General Election - the Liberal Democrats get into bed with the Conservatives and leaderless Labour remains out in the cold. However, there is a vocal backlash that fails to get the message.

• Why have the Lib Dems ‘sold out’ to the Cons?
• Why didn’t the Cons go ahead with a minority government and draw support from the other parties when needed?
• Why did Gordon Brown resign his premiership and leadership of Labour before the Lib Dem-Cons coalition was signed and sealed?

There are many more questions

The response by responsible politicians, at least those that dare to show their heads above the parapet, is there wasn’t another feasible alternative. The UK, more than anything else, needs a stable, majority government with a plan to tackle the huge public account deficit. Regardless of what side of the political divide you stand, the deficit rises above our heads, huge, dark and threatening. And it won’t go away any time soon; soon as in years, not weeks or months.

Now the people of the UK must prepare to accept compromise in the colour of their government. That means compromise in carrying out a programme of change. We may not like it, but this is the government we voted for. Not that anyone voted for a Lib Dem and Cons coalition; we just didn’t vote a single party into an outright majority. And what affects the people affects business too. Business must tighten its collective belt and steady itself for the rough ride to come.

Most likely the coming austerity measures will raise raw materials costs, perhaps through VAT, raise labour costs through a National Insurance hike, raise energy and distribution costs and many others. Together these will make every business less competitive. If the Treasury gurus get it wrong, Sterling will fall and add to the burden by increasing the cost of imported goods.

What should the prudent businessman do?

At this early stage, the best course is unclear. Choices include: consolidate the business model, streamline the enterprise and maximise the resilience the business has to external forces.

However, some opportunities require risk-taking. Don’t rule out these choices. Do the sums, establish the risks and rewards. If the balance is in your favour, take the risk; implement the new process, source new tools or change the business model. This is an opportune time to make beneficial changes where you have proved the costs and benefits.

The situation must get worse before it gets better. The UK must climb, scale and finally conquer that mountain of national debt - and this is the relative ‘calm before the storm’.

Those businesses that survived through the recession and financial chaos have a window in which to strengthen their positions before the next onslaught. Make it count and emerge the other side better equipped to face your market and your customers.

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